FINAL SPEECHES

New Zealand Herald, Volume LXXIV, Issue 22859, 14 October 1937, Page 15

FINAL SPEECHES

STONEWALL RELAXES MORE TAX CRITICISM PROMISES AND UNCERTAINTY [BY TELEGRAPH SPECIAL REPORTER] WELLINGTON, Wednesday The long-drawn debate on the Annual Taxing Bill was completed in the House of Representatives to-night. The second reading, for which urgency was taken yesterday by'the Prime Minister, Mr. Savage, was the subject of an Opposition stonewall, but this was relaxed when the debate was resumed this evening. After four more speeches the debate ended and the Minister of Finance, the Hon. W. Nash, exercised his right of reply. The lit. Hon. G. W. Forbes (Opposition—Hurunui) said the Government had maintained from the outset that changes in tho taxation were overdue. It had not been pressed to make those changes last year, but 12 months had passed and the promised overhaul should have been completed before now. Eating up Increased Revenue

"In many cases," said Mr. Forbes, "increased taxation is eating up the whole of the increased revenue due to more prosperous times. The bulk of taxation, comes, not from the private and wealthy taxpayer, but from industry, and this means the reduction of reserves which could be used for the improvement and expansion of industry. If a man enjoys a big income ho should be prepared to pay his share in taxation, but industry should not be crippled. "On top of it all we have tho Prime Minister creating further uncertainty," Mr. Forbes continued. "He promises to do things and then talks about au election. We were sitting here quietly and peacefully and suddenly something nipped the Prime Minister and ho thought he would like an election. This does not suggest that promises are going to be kept" Another Point of View

Mr. J. A. Lee, Parliamentary UnderSecretary for Housing, said the revenue from taxation was certainly higher but on the other hand people were enjoying larger incomes and were butter able to contribute toward increased revenue. There were hundreds of companies which for years had been yearning to pay income tax, yearning to be able to earn profits which could be taxed. In all probability every member ol' the House had some dead script that could tell that tale. The. Minister of Labour, the Hon. H. T. Armstrong: They can have my Brian Jiorus. "Past Governments set up committees to deal with taxation," said Mr Lee. "They appointed learned Judges of the Supreme Court and reports were tabled in Parliament. In good times they reduced the income tax and then went on the London market and borrowed to make up the deficiency. One previous Minister of Finance even hypothecated the sinking funds. He first of all paAvned all he could and then he pawned the pawn tickets. That is the classic alternative offered by tho Opposition." Time Required for Changes

Nobody doubted that there should be alterations in the incidence of taxation, Mr. Lee continued, but sweeping changes could not be made in a hurry. Company tax might also be altered so that the man who earned the most in dividends would be the one most heavily taxed. On the other hand something would, have to bo done to prevent the piling up of reserves of production capital instead of the supply of consumers' goods. The belief that confiscation was the ultimate objective of the Government's taxation proposals was expressed by Sir Alfred Ransom (Opposition— Pahiatua). The aim, he said, was to extract accumulated reserves from every individual in the country. Many Labour members subscribed to the view that the State should own all the land and that was probably the main reason for a high graduated land tax.

The Government was anxious that primary producers should be State tenants rather than owners of their own land, said Sir Alfred. In similar fashion secondary industries were being taxed and regulated out of existence. In a single year the Labour Government had introduced now fewer than 239 Orders-in-Council.